EBRD invests in Luminor Bank bonds

Luminor Bank to develop into a self-sustainable pan-Baltic financial institution

Diversification of funding resources

Supporting Luminor Bank in its efforts to become a self-funded and independent pan-Baltic financial institution the EBRD is investing up to €150 million in a series of senior bonds issued by the bank under its European Medium Term Note (EMTN) programme.

An initial investment of €60 million was committed during a first €350 million public issuance, for which Citi, Goldman Sachs, JP Morgan and Nordea were the bookrunners. The bond carried a 1.5 per cent coupon. It was a landmark debt capital market transaction on the euro market coming from the Baltic region.

The funds will allow Luminor to diversify its funding resources. More competition will challenge existing market leaders and is expected to benefit commercial and retail customers with more choice, better services and attractive prices.

The transaction also underpins the development of a pan-Baltic capital market to which the three countries of the region and the industry are strongly committed. A conference at the EBRD in London today is assessing progress so far and remaining challenges.

Luminor was established in 2017 through the merger of Nordea Bank AB and DNB Bank ASA Baltic operations and is operating across the Baltics. Luminor provides universal banking services and currently has 1.1 million customers in Estonia, Latvia and Lithuania.

The next step in its strategy is to complete the restructuring and integrate its three entities in the region into one bank. This cross-border merger supports Luminor’s ambition to be a strong, local and customer-centered financial services provider with efficient governance and business operations across the Baltics.

The EBRD has been working in the Baltic states since 1991 and to date has invested some €2 billion in more than 250 projects in Estonia, Latvia and Lithuania. Strengthening private enterprises and developing the capital market are among the Bank’s priorities in these countries.